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We did what we had to do for our nation and now hope to make profit from exports: Adar Poonawalla

We did what we had to do for our nation and now we are looking forward to exports both to make some profits and also to support those countries. Whatever little profit we made in India was used up in scaling up, says Adar Poonawalla, CEO, Serum Institute of India.

Let’s go back about two years when you first took that bet to start producing large doses of Covishield without knowing what came next?
Thank you for those kind words. But you know, it is a credit to all the healthcare workers and Modiji’s vision of getting the ministries and government of India agencies and others to work together with manufacturers. Everyone who finally administers the doses deserves the credit. I am just someone who took just one bet in early 2020; when the WHO said there is a pandemic that is spreading faster and deadlier than anything else that they have seen before. I had a choice whether to just wait on the sidelines or take a bet early on, invest a lot of money that I did not have. We went to the Gates Foundation, Covax and many other countries to support us. The Government of India gave us an advance in 2021 also to scale up further which we are very grateful for.

As a result, here we are today with so many challenges that the media had been following from different regulatory approvals and we had a fire as well in January at our campus. We had to overcome a lot of challenges that I personally had never had to deal with in my life. We came through it and we got over all of that and now we are making more than 220 million doses per month and rapidly increasing the upticks. If by the end of December, almost everybody who has taken the first dose gets the second dose as well, then it will be another moment to celebrate.

You talked about so many challenges on the way. What was the toughest part? After the second wave started hitting, suddenly there was a lot more enthusiasm for taking the vaccine and we just did not have the requisite doses as per our population. I recall that you spent a few weeks in the United Kingdom and there was speculation that you went there because you are just getting too many calls from governments all over the world and from companies asking for vaccines.
That was a tough period because I had to explain to a lot of my foreign partners and others and that is why I went to the UK. They could not travel as there were travel restrictions. I had to tell and other donors who had supported us that I need to vaccinate my country to a certain level before I can come back to you. That was initially very hard for anyone to digest because everyone wanted the vaccine and I went through a particularly tough moment personally and professionally. But I can understand that and when people realised that there is nothing beyond a point I can do myself, everyone was super supportive and said they will wait for their turn, but just give us a schedule and a timeline when we can get the vaccine.

That is just what we did and eventually we satisfied everybody and now the only ones we need to satisfy are the foreign countries who are still waiting for the doses. That will also happen in November and December. We are now in a good place but yes that was a tricky time because there were not many answers I could offer to people accept to buy some time.

Was this in any way a profitable venture? This is in a true sense service to the country. Today India is not going around with a bowl asking countries for vaccines because you have made what we need and the most of it but was it a profitable venture at all?
Every business has to look at re-investing their profits. We invest 95% of all our profits every year in building capacity, buying technology. We have got 8,000 employees which increased by another 1,200 during the Covid pandemic because we needed more hands on deck. We have made profits.

Initially there was a discussion on the pricing and all of that. We were just trying to make sure that the pricing was such that it was sustainable and that we would not make losses and we achieved that. The vaccines that were being sold overseas, was not based on a cost plus structure. It was based on how much value there is to a commodity. Of course no one wants to take advantage of the situation. We priced our vaccine in conjunction with the government. Most of it was at Rs 200 which the government was buying it for. We hardly sold anything in the private market because as everyone was getting it for free, no one wanted to pay for it.

So despite that policy being available, we hope to make profits now in the exports. We did what we had to do for our nation and now we are looking forward to exports both to make some profits and also to support those countries. Not that we have not made any profits so far, but that has just been enough to put back into the raw material and capex which we are happy to do to for expanding our capacity.

In fact, I was very vocal that the industry needs advances from the government which the government very generously gave. We had to borrow money at a point when we had scaled up. We did not have enough money to buy enough raw materials from the US and other countries which was also hampering our scaling up in April, May. All that took its course as well and that itself was another challenge.

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